The Australian: Plan to boost LNG use in growing domestic market [March 15, 2006]

A REVOLUTIONARY plan to switch the Australian domestic energy market's dependence on coal to gas will be launched at a conference in Perth today.

Federal Resources Minister Ian Macfarlane will announce an industry-government alliance whose primary goal will be to convert Australia's domestic energy market to a natural gas economy.

Mr Macfarlane will outline the strategy as he opens a national safety conference in Perth, organised by the Australian Petroleum Production and Exploration Association, the oil and gas industry's peak lobby group.

The proposed industry-government alliance, spearheaded by APPEA, will set a number of goals, including ensuring that natural gas is used for up to 70 per cent of all new energy capacity.

The strategy aims to treble liquefied natural gas production to more than 50 million tonnes a year by the end of the decade.









Another goal is to double the use of natural gas as a feedstock for resource processing.

The alliance is a major change for APPEA, which has in recent years attacked the federal Government for providing only limited incentives for oil and gas exploration when Australia is becoming more dependent on imports of crude oil and petroleum products to keep transport moving.

APPEA has also lobbied strongly to have the petroleum resources rent tax modified to encourage more production.

Driving the minister's belief is a view that Australia has a natural claim to be one of the world's top five LNG exporters.

While Mr Macfarlane has been encouraging new markets, including China, Mexico and California, to consider the safe and competitively priced option of importing Australian LNG, it is understood he believes the time has come to focus on building the domestic gas market.

APPEA's role in the strategic alliance is to dramatically alter how natural gas is used, and how much, in the Australian domestic market.

The strategy is based on changing business and community attitudes about energy production and opening new natural gas options.

Despite his enthusiasm for building the domestic gas market, Mr Macfarlane will not be supporting a west-east transcontinental pipeline to bring gas from the remote northwest to markets in Australia's southeast.